TruPhone has a good diagram of how SIP works (SIP being the standard on how to make calls "over" the internet)
The basic premise is that if you are going to do a phone call from say the UK to the USA you:
* Start the call in the UK
* Get to a SIP router in the UK
* Send via SIP over the internet
* Send the call from a SIP router in the States to the end recipient
Doing this you can see that you would pay a local rate call in the UK and a local rate call in the States, with the internet handling the call inbetween.
As 2xlocal calls is usually cheaper than 1 international call its an attractive way to ring people.
As you can also tell, it should be very rare that doing a UK to UK call would work out cheaper over SIP unless you are using a transport mechanism that costs lots of money (eg. standard mobile rate to a land line @ 25p per minute)